MONOPOLIES AND RESTRICTIVE TRADE PRACTICE (MRTP) ACT, 1969

BACKGROUND

• Passed in Parliament : 18.12.1969• Came into force : 01.06.1970• Recommended by Dutt Committee• Applicable to whole of India except

Jammu Kashmir• Significantly amended in 1982,

1984, 1985 and 1991

Prevent concentration of economic power in the hands of few rich

Provide control of monopoliesProhibit restrictive and unfair trade

practices

A commission will be set-up to look after the proceedings under this act

INTENT

GET TO KNOW THESE!• Abuse market in terms of

production and sales• Low quality product at

high cost

Monopolistic Trade Practice

• False representation of goods and services

• Bogus advertisements to mislead consumers

Unfair Trade

Practice

• Block flow of capital into production

• Prohibit competition

Restrictive Trade

Practice

Upon receiving a complaint from any trade association, consumer or a registered consumer association, or

Upon reference made to it by the Central Government or State Government

Upon an application to it by the Director General, or

Upon its own knowledge or information.

INQUIRY BY THE COMMISSION

o Summoning and enforcing the attendance of any witness and examining him on oath;

o Discovery and production of any document or other material object producible as evidence;

o Requisition of any public record from any court or office.o Issuing any commission for examination of witnesso Appearance of parties and consequence of non-

appearance.o To require any person to produce before it and to examine

and keep any books of accounts or other documents relating to the trade practice, in its custody.

o To require any person to furnish such information as may be in his possession in relation to the trade carried on by any other person.

o To authorize any of its officers to enter and search any undertaking or seize any books or papers, relating to that particular undertaking, if the commission suspects that such books or papers are being or may be destroyed, mutilated, altered, falsified or secreted.

POWER OF THE COMMISSION

I. Temporary Injunction Activities of the undertaking

charged with, will be stopped until further orders

II. Compensation The particular concern is liable to

pay the compensation to those who were affected

REMEDIES UNDER THE ACT

Not in force now Replaced by ‘Competition Act, 2002’ Came into force : 01.09.2009

Aim of the Act :• Eliminate practices having adverse effect on

competition• Promote and sustain competition• Protect interest of consumers• Ensure freedom of trade carried on by other

participants

CURRENT STATUS OF THE ACT

Case studyColgate Palmolive (India) Ltd. vs MRTP Act,1969Highlights: “Colgate Trigard Family Good Habits Contest” The commission alleged it to be:

¤ An unfair trade practice causing injury and loss to the consumers (of tooth brushes) and

¤ A restrictive trade practice eliminating competition among the manufacturers of tooth brushes

Colgate Palmolive (India) Ltd. won the case!

COMPREHEND…

THANK YOU!

Presented by:

BHARTI GOYAL D.III B.COM [CA]